Dissolution of company in liquidation may follow when no assets or funds remain and winding up cannot continue.

Gujarat HC held that a company in liquidation may be dissolved under Section 481 of the Companies Act, 1956 where no realizable assets or funds remain and further winding up cannot proceed. The Court relied on the absence of possession of the registered office and factory premises, prior sale of secured assets in recovery proceedings, no workers' claims after public notice, and no cash, bank balance, or fixed deposits. It found dissolution just and reasonable in the circumstances and discharged the Official Liquidator.

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Issues: Whether the company in liquidation was liable to be dissolved under Section 481 of the Companies Act, 1956 for want of funds and assets, and whether the Official Liquidator could be discharged.

Analysis: The report showed that the registered office and factory premises could not be taken into possession, the secured assets had already been sold in recovery proceedings, no workers' claims were received despite public notice, and the company had no cash, bank balance, or fixed deposits. The statutory conditions for dissolution were therefore satisfied, namely that the winding up could not be proceeded with for want of assets and funds and that dissolution was just and reasonable in the circumstances. The filing of half-yearly statements under Rule 298 of the Companies (Court) Rules, 1959 supported completion of the liquidation process.

Conclusion: The company was ordered to be dissolved under Section 481 of the Companies Act, 1956, and the Official Liquidator was discharged.

Ratio Decidendi: Where a company in liquidation has no realizable assets or funds and further winding up cannot proceed, the Court may order dissolution under Section 481 of the Companies Act, 1956.

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